'You do do evil!'

Brittin insisted that Google came down on the right side of that line when it came to UK staff. He said that prices were 90 per cent auction-based, so UK staff couldn't do any price or discount negotiation, and that 99 per cent of British customers never spoke to anyone in London because they bought ads online.

He later clarified that that the one per cent of customers included Google's major clients, who gave the web behemoth "60 to 70 per cent of revenue".

Dixon trotted out the usual argument that no tax laws were broken by Google and companies with similar globe-spanning corporate structures.

"The types of relationships you're seeing here are common. Lots of overseas companies set up this way and equally lots of UK companies set up this way when they're trading overseas," he said.

Towards the end of the questioning, Brittin tried to make the same argument, but Hodge said the point was not illegality, but immorality.

"You're a company that says 'we don't do evil' and I think you do do evil in using smoke and mirrors to avoid paying tax," she said.

Meanwhile, rumours also swirled today that Amazon would be the next firm to be recalled by the committee after its latest Companies House filing showed that its UK subsidiary paid £2.4m in corporate taxes last year on sales of £4.3bn, despite getting as much as £2.5m in government grants to expand its warehouse operations in Scotland.

Taxes are, of course, paid on profits, not sales, and Amazon UK's profits are reported by the firm's Luxembourg business Amazon EU Sarl, much as Google's profits go to Ireland.

A PAC spokesperson said the committee "had not made a decision to call Amazon".

But Hodge told The Register:

"Paying £2.4m in tax on £4.3bn of sales is just a joke. Companies like Amazon should pay their fair share of tax based on their economic activity in this country and the profits they make here.

"Its behaviour is not only unfair, it is anti-competitive, putting British businesses that do pay their proper tax at a disadvantage.” ®